OBJECTIVES: To demonstrate the potential benefits of coverage for pharmacologic smoking cessation treatments at the workplace by evaluation of a cost of illness model. METHODS: A cost of illness model utilizing a hypothetical cohort of 1000 employees was used to evaluate the impact of coverage versus non-coverage of pharmacologic smoking cessation treatments in the workplace represented by direct benefits to employee health and indirect benefits to employers (decreased absenteeism and increased productivity). Data were derived from a previously published smoking cessation model with future costs and outcomes discounted at 3% annually. RESULTS: By providing coverage of pharmacologic smoking cessation treatments, the rate of smoking cessation could increase by 5%, which translates to almost an additional 100 of 1000 smokers quitting over a 10-year period. This would have a direct impact on health care costs due to the avoidance of various smoking-related illnesses, such as heart disease, cerebrovascular disease, and lung cancer. In the first year following the initiation of coverage, direct savings on health care costs is projected to be approximately $21,000. After 5 years, the savings increases to $231,000, and over 10 years, a savings of $610,000 is projected. When indirect cost savings are considered, the projected economic benefit almost doubles. In the first year, health care cost savings increase to $41,000, and after 5 and 10 years, savings increase to $451,000 and $1.2 million, respectively. If the rate of smoking cessation increased from 5% to 10%, health care savings would increase to $41,000 after the first year and $1 million after 10 years. By incorporating indirect cost savings, these numbers increase to $82,000 after the first year and $2 million after 10 years. CONCLUSION: This cost of illness model demonstrates a potentially important savings resulting from the provision of pharmacologic smoking cessation treatment.